By Dawn Bolton-Smith
ASX 200 INDEX – Semi-log Scale – Weekly Close (4872)
My comment published in the Mar/Apr issue of YTE, headed ‘Tip of the Iceberg’, was made at precisely the end of the Santa Claus rally. The market plunged from the 4955 high to a low of 4464, those 491 points eroding the considerable gains made in most sectors, particularly the miners. The double bottom at 9/2/10 brought in fresh buying, enabling the index to climb back to 4872 – a whisker away from the recovery high to date of 4955 on 11/1/10. In the absence of a new high it is best to keep the current table of retracements in mind. The Dow Jones will continue to call the tune. It could well be that we are not out of the woods yet. Sentiment can turn very quickly.
Dates to be aware of include:
From the July 2009 low: 108 trading days (TDS) = 11/12/09 (low on 10/12/09); 144 TDS = 29/1/10; 180 TDS = 29/3/10.
From the March 2009 low: 270 TDS = 29/3/10; 216 TDS = 5/1/10; 288 TDS = 15/4/10.
From the January 2010 high: 45 TDS = 22/3/10; 72 TDS = 18/5/10; 144 TDS = 5/8/10.
From the October 2007 high: 144 weeks = 16/7/10.
Markets can be full of surprises. The trending indicators, especially the 30 period moving averages, are not to be ignored. They work on all time spans.
ASX 200 INDEX – 20-point 1-box point and figure (4860)
Here is the simplest chart. The Os and Xs are plotted on the daily close for direction and give the most sensitive signal, as opposed to the 3-box reversal chart, which requires three unit points to change direction. Both assist in analysis when determining pivot points. The 4520 plot on 5/2/10 (index 4514) was into the support .......
Excerpted from an article originally published in the May/Jun 2010 issue of YourTradingEdge magazine. All rights reserved. © Copyright 2010, MarketSource International Pty Ltd.
If you are a subscriber to YourTradingEdge magazine, you will receive this article in your May/Jun 2010 issue of YTE.
If you are not a subscriber, click here to subscribe, or to purchase this issue as a single back issue, click here.
